Accounting Cycle Project 12e - Solid Footing

Pictures 01-18.

Instructions: You will be recording the July 2019 transactions for Lenny's Lawn Service. Inc. After recording the July transactions you will be preparing a Pre-Closing Trial Balance, Income Statement, Statement of Stockholders' Equity, Balance Sheet, and PostClosing Trial Balance. You are given the following: E} 0-0410 July 2019 transactions and Additional Information -- Trans tab Chart of Accounts with Account Numbers and Account Names -- Chart Accts tab General Journal pages - Journal tab General Ledger -- GL Assets. GL Liab-Equity, GL Rev-Exp tabs Forms for the July 31, 2019: PreClosing Trial Balance (Trial Bal tab), Income Statement and Calculation of Retained Earnings (IS 3. RE tab), Balance Sheet (BalSht tab), and Post-Closing Trial Balance (Post Close TB tab) To Complete Your Workbook do the following: us :9 E} Print the July Transactions (click the Trans tab and then click the Printer Icon) Use YOUR Transaction sheets do not use anothersfudent's sheets Print the Chart of Accounts (click the Chart Accts tab and then click the Printer Icon) Record the July transactions in the General Journal. Click the Journal tab and record your entries directly into the General Journal. Look at the July 1 Notes Payable transaction. which has already been entered, for an example of how to make your entries. Do not put the 'X' in the Posted column at this time. Use the printed Chart of Accounts as a reference source for the Account Numbers and Account Names that are available in Lenny's accounting system. To make posting from the General Journal to the General Ledger easier, is recommended that you print the General Journal - click the Journal tab and then click the Printer Icon. Post the entries from the printed General Journal to the General Ledger accounts. Click the GL Assets, GL Liab-Equity, and GL Rev-Exp tabs to nd the accounts to be posted. Record your postings directly into the General Ledger. As you post an amount to an account be sure to enter the General Journal Page # into the Journal Page # column. See the rst posting to the Cash account for an example. After you post an amount to a General Ledger account, then hand write an 'X' in the Posted column of the printed General Journal. This will help you keep track of which entries you have posted. Enter the "X's. which you hand wrote on your General Journal pages, into the General Journal. Click the Journal tab and enter the 'X's in the Posted column For each business transaction that occurs during the accounting 5 period. determine the effect of the transaction on the General Ledger E accounts. Make an entry in the General 5 Journal for each transaction and post the entry to the General 5 Ledger accounts. - In Save As: enter LastNameFirs'tNan'I - Format must be Excel Macro-Enabler - Before clicking Save. be sure the le is on your Mac Desktop, and not to an on - Click Save Steps 1 and 2 in the Accounting Cycle Step 1 Step 2 Pg. 2 Determine the required adjusting entries as of July 31, 2019. The information needed for the adjusting entries is on the page titled "Additional Information". This is the second page Step 3 in the Accounting Cycle that printed when you printed the Trans tab. Click the Journal tab and record your adjusting entries in the General Journal. Use the printed Chart of Accounts as a At the end of the accounting period, before preparing the eference source for the Account Numbers and Account Names that are available in : financial statements, determine Lenny's accounting system. Put your adjusting entries on Page # 4 of the General Journal. if any of the General Ledger account balances need to be Post the adjusting entries from the General Journal to the General Ledger accounts. adjusted. Enter any required Click the GL Assets, GL Liab-Equity, and GL Rev-Exp tabs to find the accounts to be adjusting entries into the General posted. As you post an amount to an account be sure to enter the General Journal Page # Journal and post the adjusting Into the Journal Page # column. After you post an amount to a General Ledger account, entries to the General Ledger click back on the Journal tab and enter an "X" in the Posted column of the General Journal. accounts. Print Lenny's General Ledger by: clicking the GL Assets tab and then clicking the Printer icon, clicking the GL Liab-Equity tab and then clicking the Printer icon, and clicking the Step 4 in the Accounting Cycle GL Rev-Exp tab and then clicking the Printer icon. Prepare a Pre-Closing Trial Using the printed General Ledger, enter the ending account balances into the July 31, 2019 Balance to determine that the Pre-Closing Trial Balance. Click the Trial Bal tab and enter the amounts into the Pre-Closing Trial Balance. Print the July 31, 2019 Pre-Closing Trial Balance by clicking accounts in the General Ledger are in balance the Printer icon. Step 5 in the Accounting Cycle Using the printed July 31, 2019 Pre-Closing Trial Balance, prepare the July 2019 : Prepare an Income Statement Income Statement. Click the IS & RE tab and enter the amounts into the Income from the ending balances in the Statement. General Ledger revenue and expense accounts. Step 6 in the Accounting Cycle Using the printed General Ledger and the Net Income amount, prepare the July 2019 Calculate the ending balance Statement of Stockholders' Equity. Click the IS & RE tab and enter the of the Retained Earnings amounts into the Statement of Stockholders' Equity. account that is needed for the preparation of the Balance :Sheet Step 7 in the Accounting Cycle Prepare the Balance Sheet Using the printed July 31, 2019 Pre-Closing Trial Balance and the Retained Earnings amount from the ending balances in the from the Statement of Stockholders' Equity, prepare the July 31, 2019 Balance Sheet General Ledger asset accounts, Click the BalSht tab and enter the amounts into the Balance Sheet. liability accounts, Common Stock account, and the calculated ending balance for the Retained Earnings account Prepare the closing entries. Click the Journal tab and enter the closing entries into the Step 8 in the Accounting Cycle General Journal. Place your closing entries on Page # 5 of the General Journal. Prepare and enter the revenue : and expense closing Post the closing entries from the General Journal to the General Ledger accounts. : entries into the General Click the GL Liab-Equity, and GL Rev-Exp tabs to find the accounts to be posted. : Journal, and post the closing As you post an amount to an account be sure to enter the General Journal Page # into : entries to the General Ledger the Journal Page # column. After you post an amount to a General Ledger account, accounts. click back on the Journal tab and enter an "X" in the Posted column of the General Journal. Step 9 in the Accounting Cycle : Prepare a Post-Closing Tria Click the Post Close TB tab and prepare the July 31, 2019 Post-Closing Trial Balance. Balance to determine that the accounts in the General Ledger : are in balance and ready to start a new Accounting Cycle. Your project is complete! Your instructor will provide you with directions on how to submit your project.Lenny's Lawn Service, Inc. - Transactions - Additional Information July 2019 Transactions Date Description of the Transaction July 1 Borrow $35,000.00 from 1st Bank by signing a 24 month note. (As an example of how to journalize and post a transaction -- this transaction has already been entered into the General Journal and posted to the General Ledger.) July 1 Receive $80,050.00 cash from new investors, and issue $80,050.00 of Common Stock to them. July 1 Purchase $45,900.00 of new mowing equipment, paying cash to the mower dealer. July 1 Pay $500.00 cash for the July truck rental. July 3 Invoice a new customer $2,695.00 for a completed mowing job -- customer will pay in 10 days. July 5 The Board of Directors declares a cash dividend. The total amount of the dividend is $22,500.00 The Date of Record is set as July 15. The Date of Payment is set as July 31. July 7 Pay the employees $6,000.00 for work performed during the 1st week of July. July 10 Complete a mowing job for a new customer -- customer pays $6,500.00 cash for the job. July 12 Collect $3,500.00 cash from the golf course for special rush mowing job completed on May 31. July 14 Pay the employees $7,500.00 for work performed during the 2nd week of July. July 15 Purchase $1, 180.00 of supplies from the mower dealer. The supplies are consumed immediately. Lenny's will pay the mower dealer for the supplies in about 2 weeks. July 15 Collect $2,695.00 on account. The cash that is received is from the new customer for the job that was completed on July 3. July 17 One of the original mowers purchased in January of 2018 broke down and is repaired by the mower dealer. The cost of the Mower Repair job is $645.00. Lenny's will pay the mower dealer in 30 days. July 19 Purchase for cash $21,000.00 of supplies. These supplies will be consumed over the next 12 months. July 20 Collect $30,000.00 from the property management company for work performed in June. July 21 Pay the employees $6,850.00 for work performed during the 3rd week of July. July 23 Receive a $22,500.00 advance payment from the university. The advance payment is for 6 months of work which will be performed from August 1, 2019 to January 31, 2020. July 25 Complete a special mowing job for the golf course. The total price for the mowing job is $3,300.00. The golf course pays $500.00 cash on this date and will pay the remainder on August 25. July 27 Complete a mowing job for a new customer -- customer pays $3,800.00 cash for the job. July 27 Pay $1, 180.00 cash to the mower dealer for the supplies purchased on account on July 15. July 28 Pay the employees $5,300.00 for work performed during the 4th week of July. July 31 Invoice the property management company $19,300.00 for July mowing work. The property management company will pay the invoice on the 20th of next month. July 31 Pay the cash dividend which was declared on July 5.Equl pment: Supplies: Mowing Service at the University: Wages Due the Employees: Bank Loan: Additional Information The $48,000.00 beginning balance in the Equipment account relates to the mowing equipment which was purchased on January 2, 2018. For information related to this mowing equipment see Page 70 in the Solid Footing book. This equipment continues to be used and should be depreciated for the month of July. The following information relates to the new equipment which was purchased on July 1, 2019: > The new equipment was placed into service on July 1, 2019 and should be depreciated for the month of July. The estimated useful life of the new equipment is 5 years. At the end of 5 years, the new equipment will have no future value and will be scrapped. > The new equip - - -' be depreciated using the straig A: method. The monthly mowing service was provid- . - the university per the contract signed on April 1, 019. For information on the contract with the university and the related advance payment, see Pages 95 and 98 in the Solid Footing book. ll At the end of July th. - . The last wage payment was made to the employees on July 28, 2019. The employees worked on July 29, 30, and 31. For these three days of work the employees earned $2,575.00 of wages. These three days of wages will be paid to the workers during the first week of August. The interest on the loan from 1st Bank will be paid every three months. The first interest pay nt to the bank will be made on September 30, 2019. Lenny's calls the bank on July 31 and the bank indicates that the interest on the loan for July is $785.00. Account # Account Name Assets: 100 Cash 105 Accounts Receivable 110 Supplies 150 Equipment 155 Accumulated Depreciation Liabilities: 200 Accounts Payable 205 Wages Payable 210 Interest Payable 215 Unearned Revenue 220 Dividends Payable 250 Note Payable Equity: 300 Common Stock 305 Retained Earnings Revenues: 400 Service Revenue Expenses: 500 Supplies Expense 505 Mower Repair Expense 510 Wages Expense 515 Truck Rental Expense 520 Depreciation Expense 550 Interest ExpenseLenny's Lawn Service, Inc. - General Journal Page # 1 2019 Account Account Name Posted Debit Month-Day Number Credit 7-1 100 Cash X 35,000.00 250 Notes Payable X 35,000.00 Borrowed on Note Payable 7-1 100 Cash X 80,050.00 300 Common Stock X 80,050.00 7-1 150 Equipment X 45,900.00 100 Cash X 45,900.00 7-1 515 Truck Rental Expense X 500.00 100 Cash X 500.00 7-3 105 Accounts Receivable X 2,695.00 400 Service Revenue X 2,695.00 7-5 Dividends X 22,500.00 220 Dividends Payable X 22,500.00 7-7 510 Wages Expenses X 6,000.00 100 Cash X 6,000.00 7-10 100 Cash age X 6,500.00 400 Serevice Revenue 6,500.00 7-12 100 Cash Accounts Receivable X 3,500.00 105 X 3,500.00 7-14 510 Wages Expenses X 7,500.00 100 Cash X 7,500.00 7-15 110 Supplies X 1,180.00 200 Accounts Payable X 1, 180.00 7-15 100 Cash X 2,695.00 105 Accounts Receivable X 2,695.00 7-17 505 Mower Repair Expenses X 645.00 200 Accounts Payable X 645.00 7-19 110 Supplies X 21,000.00 100 Cash X 21,000.00 7-20 100 Cash X 30,000.00 105 Accounts Receivable X 30,000.00 7-21 510 Wages Expenses X 6,850.00 100 Cash X 6,850.00 7-23 100 Cash X 22,500.00 215 Uneard Revenue X 22,500.00 7-25 100 Cash X 500.00 105 Accounts Receivable X 2,800.00Lenny's Lawn Service, Inc. - General Journal Page # 2 2019 Account Month-Day Account Name Posted Debit Credit Number 400 Service Revenue X 3,300.00 7-27 100 Cash X 3,800.00 400 Service Revenue X 3,800.00 7-27 200 Accounts Payable X 1, 180.00 100 Cash X 1, 180.00 7-28 510 Wages Expenses X 5,300.00 100 Cash X 5,300.00 7-31 105 Accounts Receivable X 19,300.00 400 Service Revenue X 19,300.00 7-31 20 Dividends Payable X 22,500.00 100 Cash X 22,500.00 7-31 520 Deprecietation Expenses X 765.00 155 Accumulated Depreciation X 765.00 7-31 500 Supplies Expenses X 1 10 Supplies Page 2 XLenny's Lawn Service, Inc. - General Journal Page # 3 2019 Account Number Account Name Posted Debit Credit Month-Day Page 3Lenny's Lawn Service, Inc. - General Ledger Account # 100 Cash 2019 Journal Month-Day Page # Debit Credit Balance 7-1 Beginning Balance 38,250.00 38,250.00 Dr 7-1 35,000.00 73,250.00 Dr Page 1 Account # 105 Accounts Receivable 2019 Journal Month-Day Page # Debit Credit Balance 7-1 Beginning Balance 33,500.00 33,500.00 | Dr\fLenny's Lawn Service, Inc. - General Ledger Account # 200 Accounts Payable 2019 Journal Month-Day Page # Debit Credit Balance 7-1 Beginning Balance 0.00 0.00 Cr Account # 205 Wages Payable 2019 Journal Month-Day Page # Debit Credit Balance 7-1 Beginning Balance 0.00 0.00 Cr Account # 210 Interest Payable Page 1 2019 Journal Month-Day Page # Debit Credit Balance 7-1 Beginning Balance 0.00 0.00 Cr Account # 215 Unearned Revenue 2019 Journal Month-Day Page # Debit Credit Balance 7-1 Beginning Balance 8,000.00 8,000.00 CrAccount # 220 Dividends Payable cm" -m-m- Account # 305 Retained Earnings Journal Page # l Beginning Balance 48,125.00 Lenny's Lawn Service, Inc. - General Ledger Account # 400 Service Revenue 2019 Journal Month-Day Page # Debit Credit Balance 7-1 Beginning Balance 0.00 0.00 Cr Account # 500 Page 1 2019 Journal Month-Day Page # Debit Credit Balance 7-1 Beginning Balance 0.00 0.00 Dr Account # 505 Mower Repair Expense 2019 Journal Month-Day Page # Debit Credit Balance 7-1 Beginning Balance 0.00 0.00 DrAccount # 510 Wages Expense Journal Month-Dayr 7-1 Beginning Balance Page 3 Account # 51 5 Truck Rental Expense Beginning Balance Account # 520 Depreciation Expense Journal Page 3 Account # 550 Interest Expense 7-1 Lenny's - July 31, 2019 Pre-Closing Trial Balance Account # Account Name Debit Credit 100 Cash 105 Accounts Receivable 110 Supplies 150 Equipment 155 Accumulated Depreciation 200 Accounts Payable 205 Wages Payable 210 Interest Payable 215 Unearned Revenue 220 Dividends Payable 250 Note Payable 300 Common Stock 305 Retained Earnings 400 Service Revenue 500 Supplies Expense 505 Mower Repair Expense 510 Wages Expense 515 Truck Rental Expense 520 Depreciation Expense 550 Interest Expense Totals 0.00 0.00Lenny's Lawn Service, Inc. CAUTION Income Statement Enter amounts into the Financial Statements by typing in the amounts. for the Month Ended July 31, 2019 Do NOT copy cells from the General Ledger or Pre-Closing Trial Balance. Service Revenue Operating Expenses: Note the new line item on Lenny's Income Statement Supplies Income from Operations. This is Lenny's income from Mower Repair the normal operations of the lawn mowing business. Wages Interest Expense, which is not a cost of operating the Truck Rental business but rather a cost of financing the business, is shown Depreciation below Income from Operations. Interest Expense is subtracted Total Operating Expenses 0.00 from Income from Operations to arrive at Net Income. Income from Operations 0.00 Interest Expense Net Income $0.00 This is the first time you have prepared a formal Statement of Stockholders' Equity for Lenny's. This statement shows what caused the change in Common Stock and in Retained Earnings Lenny's Lawn Service, Inc. from July 1, 2019 to July 31, 2019. Note that the Retained Earnings Statement of Stockholders' Equity column on the statement looks different than the calculation you for the Month Ended July 31, 2019 have been doing each month to determine the Retained Earnings amount needed for the Balance Sheet. Beginning Balance is the Common Retained starting amount. In previous Retained Earnings calculations, you Stock Earnings Total used Current Balance as the starting amount. Beginning Balance Beginning Balance July 1, 2019 $0.00 is the starting point for this calculation, because Dividends is shown Issue Common Stock 0.00 as a line item (a deduction) in the Retained Earnings column. Net Income 0.00 Dividends 0.00 The Ending Balance in the Retained Earnings column is the balance Ending Balance July 31, 2019 $0.00 $0.0C $0.00 needed for the Balance Sheet.Lenny's Lawn Service, Inc. CAUTION Balance Sheet Enter amounts into the Balance Sheet by typing in the amounts. as of July 31, 2019 Do NOT copy cells from the General Ledger or Pre-Closing Trial Balance Assets Current Assets: Cash Accounts Receivable Supplies Note the following three new sub-totals appearing on Lenny's Balance Sheet: Total Current Assets 0.0 Property & Equipment: Total Current Assets is a total of those assets, which will turn-into cash during the next 12 months or Equipment be consumed during the next 12 months. The Accumulated Depreciation comparison of Total Current Assets to Total Current Property & Equipment, net 0.00 Liabilities gives some indication of Lenny's liquidity -- that is, its ability to pay its bills in the short-term. Total Assets $0.00 Property & Equipment, net is the amount of Fixed Liabilities & Stockholders' Equity Asset cost, which remains to be depreciated in future accounting periods. Current Liabilities: Accounts Payable Total Current Liabilities is a total of those liabilities that will require payment in the next 12 Wages Payable months. In the case of Unearned Revenue, this Interest Payable current liability will be "paid-off" by Lenny's delivering Unearned Revenue mowing services to the university. Total Current Liabilities 0.00 Long-Term Liabilities: Note Payable Total Liabilities 0.00 Stockholders' Equity: Common Stock Retained Earnings Total Stockholders' Equity 0.00 Total Liabilities & Stockholders' Equity $0.00Lenny's - July 31, 2019 Post-Closing Trial Balance Account # Account Name Debit Credit 100 Cash 105 Accounts Receivable 110 Supplies 150 Equipment 155 Accumulated Depreciation 200 Accounts Payable 205 Wages Payable 210 Interest Payable 215 Unearned Revenue 220 Dividends Payable 250 Note Payable 300 Common Stock 305 Retained Earnings 400 Service Revenue 500 Supplies Expense 505 Mower Repair Expense 510 Wages Expense 515 Truck Rental Expense 520 Depreciation Expense 550 Interest Expense Totals 0.00 0.00